Business travelers heading to New York may no longer be immune from a daily add-on to their hotel bill that used to be limited to leisure destinations like Hawaii and Las Vegas. And hotels in other big cities might not be far behind.

At the leisure destinations, the hotels call these contentious charges ”resort fees,” supposedly covering the hotels’ costs of providing things like pool towel service, fitness center use, phone calls, daily newspaper and so on – and the fees are mandatory whether the guest actually uses any of the covered services or not.

Probably the most notorious destination for charging exorbitant hotel ”resort fees” is Las Vegas, where big hotels routinely tack more than $30 a day onto guests’ final bills. And they are not included in the quoted room price during web searches.

Now, according to a report in the U.K. newspaper The Independent, resort fees are coming to many hotels in New York City under another name – the Urban Destination Charge.

The newspaper found that a number of hotels in Manhattan – especially those in the Times Square area – have started tacking a mandatory “destination fee” or “facility fee” onto guests’ bills, with the amount ranging from $15 to $25 a day. The fees are being charged by properties belonging to major chains like Marriott/Starwood and Hilton.

A Marriott spokesperson told the newspaper the fees were imposed at some of its properties as a four-month test program, and estimated that about 40 New York hotels are now charging them.

Las Vegas hotels are notorious for the size of their resort fees. (Image: Jim Glab)

Like the resort fees, the new charges are supposedly covering hotel services like Internet, fitness rooms, newspaper and so on, whether or not the guest uses them. They may also include a one-time food and beverage credit (even though the charge is imposed for every day of the guest’s stay), or discount vouchers to use for city tours, etc.

Hotel resort fees have been drawing scrutiny from the Federal Trade Commission for years, but so far the agency hasn’t done anything to rein them in except to warn hotels back in 2012 that they ought to be more transparent in disclosing such fees to customers.

In 2015, the FTC rejected a request from a consumers’ group that hotels should be required to incorporate resort fees into their regular room rates. Earlier this year, the FTC’s Bureau of Economics issued a report on hotel resort fees that concluded they can harm consumers by making their room searches and price comparisons more difficult. That report was issued in the final days of the Obama Administration during early January. With the changeover to Republican rule in Washington, it is considered unlikely that the FTC would come out with any new regulations restricting hotels’ freedom to assess resort and/or destination fees.

So don’t be surprised if more hotels in other urban centers take note of the New York experience and decide to tack on some new fees of their own.

Readers: Have you encountered any unexpected mandatory hotel fees recently? Where, how much, and what were they for?

The historic Driskill Hotel in Austin is a member of Hyatt’s new Unbound Collection. (Image: Hyatt/Driskill)

In hotel news this week, Hyatt creates a new brand for independent hotels; Marriott clears a hurdle in its planned merger with Starwood; what Hilton learned from its $50 cancellation fee experiment; and several Las Vegas properties boost their “resort fees.”

Marriott has its Autograph Collection, Hilton has its Curio Collection, Starwood has its Tribute Portfolio, and now Hyatt has created its own similar brand of affiliated but independent hotels that will participate in the Hyatt reservations system and loyalty program. It’s called The Unbound Collection by Hyatt. The company said the new group will feature “upper-upscale and luxury properties,” both existing and new, and will include “historic urban gems, contemporary trend-setters, boutique hotels, resorts, and more.” The first properties to join The Unbound Collection are The Driskill Hotel in Austin, Hotel du Louvre in Paris, the Carmelo Resort in Carmelo, Uruguay; and the Coco Palms Resort in Kauai.

The planned acquisition of Starwood Hotels & Resorts by Marriott International got a boost this week when the deal’s antitrust waiting period expired with no action from the federal government. “The expiration of the waiting period means the parties have cleared the premerger antitrust review in the United States, satisfying one of the closing conditions of the pending combination transactions,” Marriott said in a statement. The company noted that the waiting period in Canada also passed without any action from that government, but it noted that it is still working with competition authorities in other countries to secure their approvals. Marriott and Starwood stockholders are expected to vote on the merger March 28.

Last fall, Hilton Hotels started a test at 20 hotels, charging customers $50 if they canceled their reservation at any time after making it, unless it was within 24 hours of arrival, in which case a one night’s room charge applied (HHonors members were exempt from the fee test). That test is over, and Hilton CEO Chris Nassetta said in a call with analysts that guests who had to pay the fee “hated it.” But he said that was just the first step in Hilton’s ongoing plans to move ahead with new pricing or fee models in which customers will incur an added cost if they want the flexibility to cancel at any time – just as airline customers pay more for a fully refundable ticket. Part of the reason hotel operators want to tighten up cancellation policies is the growth of websites that allow customers to search for better prices than the one booked, then cancel and rebook at the lower rate.

Guest fees are rising at Caesars Palace and some other Las Vegas hotels. (Image: Jim Glab)

Las Vegas, one of the nation’s top convention venues and the home of the largest and most widespread mandatory “resort fees” in the hotel business, is taking things up a notch. According to the Los Angeles Times, five big Caesars Entertainment hotels on the Strip are raising their resort fees by 10 percent, from $29 to $32 a day. They are Caesars Palace, Nobu, the Cromwell, Paris, and Planet Hollywood. Although the fees are separate from room rates, guests must pay them even if they don’t use the services they are intended to cover, like Wi-Fi, local phone calls and use of the fitness center. The newspaper noted that the higher resort fees come just a few weeks after MGM Resorts in Las Vegas said it plans to start charging guests a fee for parking, whether they self-park or use valets.

A few years ago, the Transportation Department ordered a big change in airline pricing: It said that fare quotes must include all the mandatory taxes and fees that airlines had previously shown separately, usually in tiny type at the bottom of an ad.

One of the most contentious areas of hotel pricing in recent years has been the spread of “resort fees” — a mandatory charge for the availability of various hotel amenities and services (like fitness rooms, swimming pools, daily newspapers, etc.) that all guests have to pay, whether they use those things or not. The fees can amount to a significant percentage of the room rate. For example, in Las Vegas, resort fees now regularly exceed $30 per day.

A consumer group called Travelers United recently asked the FTC to require that hotels roll those charges into their room rates, since not paying them is not an option (as it is with airline checked bag fees, for example). But the FTC turned down the request.

Apparently the agency thought it took sufficient action back in 2012, when it warned the hotel industry that customers had to be notified up front — before booking — about any mandatory resort fees. but it stopped short of requiring hotels to roll those charges into their rates.

Meanwhile, apparently concerned that the resort fee is getting a bad name, some hotels are starting to call it something else. Variations include the “amenity fee” and the “service fee.” Why don’t hotels just include it in their room rate? Because showing a lower room rate is key to winning bookings through Internet search engines.

Readers: What’s the largest resort fee you’ve ever paid? Did you know about it before you booked the room?

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Editor Chris McGinnis

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